Being new to Vancouver I was very interested to see what if anything the BC Liberals were going to do to alleviate the shortage of affordable housing in the Vancouver area. For prospective buyers this is an incredibly expensive market -- San Francisco and maybe San Diego are the only markets that I can think of that are as expensive as the Vancouver market.
And while the housing market in the U.S. and in to a lesser extent Canada have cooled out, the Vancouver market still seems to be in overdrive with property values up 24% in 2006 and more than 100% over the past 5 years. Even for someone who is in the upper echelons of income earners will find it difficult to buy here. If you do buy you're essentially forced to narrow your investment portfolio to a single asset type -- real estate. Which is not a good investment strategy, but one that friends in San Francisco have felt forced into.
When I read a summary of the housing initiatives in today's Globe & Mail ("Do housing initiatives in B.C. budget go far enough?") I have to say I was disappointed. An $864 income tax savings isn't going to convince that me to take on a $400 to $600 thousand mortgage.
These days I don't normally point to the U.S. as a model we should follow, but they have it right when it comes to creating an environment that truly promotes home ownership (which is also pretty good for the economy). Allowing home owners to write down a portion of their mortgage interest payments on income tax makes sense if you want to encourage home ownership. Why don't governments in Canada get this, and if they do why don't they have the courage to act?
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